Understanding asset risks in the water sector - Learning from major hazard industries

In the UK, only a few of the water companies have managed to present an asset integrity management strategy is adequate.

Mark Boult, Mark Fisher and Robert Pratchett

Mark Fisher

Director, Enterprise Risk Management

Historically, water companies been largely reactive in the management of deterioration of assets and network reliability. Whilst this may have been tolerated in the past, as the focus on resilience intensifies, reactivity needs to turn to proactivity.

Ofwat, the regulator for the UK water sector, have made it very clear that in Asset Management Period 7 it is looking for improved network resilience for the lowest cost. Only a few of the water companies have managed to present a strategy that the regulator believes is adequate.

Asset management approaches such as ISO55000, provide a good risk-based framework for managing the life of the assets, but lack detail about how integrity is maintained to meet long-term demands. A proactive, optimised approach demonstrates that there is control over factors such as equipment deterioration and reduced resilience in the network, in a safe and cost-effective manner.

Principles of asset integrity management

Robert Pratchett

Principal Consultant, Enterprise Risk Management

Major hazard industries, for example, oil and gas, petrochemical and chemical industries, have a much more urgent need for asset resilience in terms of fire, explosion and toxic impacts on workers and the public. Like the water industry, these sectors also have the pressure to safely reduce costs while improving operational performance. The water industry can therefore learn some real and tangible lessons from the major hazard arena. But first some key principles:

Proactivity is cheaper than reactivity

Proactivity means that you understand when and how assets may fail, then intervene just before the asset performance is compromised in a planned manner. This intervention plan is optimised in terms of cost, safety and operational performance to meet the long-term needs of an organisation, its customers and other stakeholders.

Effective asset integrity management is data-led

Investing in understanding the mechanisms that degrade assets is important to predict future performance and support decisions about how to proactively manage assets. However, this only works if there is a robust feedback loop that looks for the expected damage mechanisms and updates the prediction and the optimized integrity intervention activities. 
Focus on performance not just condition

Looking at condition only tends to drive a binary decision, “does it work now, and will it continue to work until the next time we look?” This appears attractive as it focuses on the latest data often allowing the decision to be delegated to the on-site technician. However, by looking at, and trending, the performance of the asset it is possible to identify deterioration much earlier, enabling a proactive, rather than reactive response. This can often be done using existing intervention approaches, but it requires marginally greater effort in capturing and analyzing useful and trusted data. 
It is also important to ensure understanding of how performance will change over the lifetime of the asset and what should be done to optimize future performance.
Every intervention, and investigation, is an opportunity to learn and improve the prediction. Acting on the analysis of the data arriving back from worksites is critical to success.
Apply lessons learned

Every failure indicates a weakness in integrity management, either in the way the equipment was designed and constructed to deliver within a specified performance envelope, or the way it was operated or maintained. Taking this broad view of asset condition is key and means working across, what are often organisational silos to improve information flow and demonstrate control.
Applying good failure investigation techniques and root cause analyses, pinpoints not only the technical causes of failure, but also the organisational weaknesses that allowed it to happen. This should enable effective improvement action to be taken, and subsequently has the potential to prevent a range of related failures reoccurring across the asset.
Optimise, optimise, optimise

Every lesson is an opportunity to improve and enhance either the management of the asset, or the asset itself, and to ultimately gain benefits by applying learnings across all assets. Success means that asset models are working and could possibly be made more efficient. Failure means you didn’t understand your asset and the demands being made on it well enough. Constant optimisation means the maximum resilience at the lowest lifecycle costs.

Applying hazards awareness to the water sector

The water industry can significantly benefit from improved data flow and making better use of that information. Figure 1 shows two data-led feedback loops to optimize the asset and the operation of that asset.

Operational supply and demand forecasting is important to determine what performance is needed and for how long. This involves understanding:

• Customer needs

• Future demand forecasting

• Water resource management

• The potential success of demand management

• Peak-flow requirements

• Drought and low-flow conditions

• Leakage forecasts

• Extreme weather damage e.g. burst mains 

• Operating constraints.

The next step is to understand how the asset should efficiently deliver the expected performance. This means knowing the asset’s existing performance and whether it meets present demands, which assets are critical to the safe and effective operation of the network, and where performance weaknesses or constrains exist in the asset.
With this knowledge, options can be developed, and cost benefit calculations tested. Two routes are possible:
1. Optimise the asset - deliver the same performance for less effort or efficiently improve performance
2. Optimise the operation of that asset - improvements to the organisation and management systems and processes.
Taking a full lifecycle approach, as is becoming the norm in oil and gas, may mean that optimising the design or operation of the asset is desirable. Mature networks, which are often operating beyond the designated design life, are still widely in use but are rarely optimal. This often impacts their inherent resilience. Reconfiguring networks and assets to increase their reliability, availability and resistance to failure often means simplification – an optimised network is often cheaper to run and maintain as well as being more resilient.
Identifying and utilising existing supply route diversity, drain down capacity, and reduced pump demand helps to; reduce outages, leakage and energy consumption, whilst maintaining water quality.

Attaining and retaining expected performance

If the asset design is as optimal as required, the next question is how to operate that asset in a manner that allows the performance to be delivered as efficiently as possible. This means a proactive approach to asset integrity that is consistent with the criticality of the asset, its performance, and how that will change in the future. This focuses effort on effectively managing deteriorating performance and averting impact on customers.
Failures will still happen. If the cause is a predictable deterioration mechanism, then asset integrity management is weak and needs attention. However, the second-best thing to knowing when an asset will fail, is rapidly knowing that it has failed. 
Resilience also means acting quickly when things go wrong to restore supply. Therefore, early warning that failure has happened is key. Condition monitoring and other sensor data not only improves understanding of the condition of the asset but also highlights whether the system has failed to perform correctly. Having clear plans, and up-to-date hydraulic models help to ensure a swift response and resolution of any issue.
The feedback from these two optimisation branches allows informed decisions to be made about the performance demand on your asset today and in the future, in tandem with the cost implications of changes in those demands. Data analytics and risk models give clarity to complex issues and situations, thereby allowing testing of options for more cohesive and concise decision-making. This can only be achieved if the underlying data is accurate and can be trusted.

Tangible benefits

The major hazard industries have benefited from performance-driven approaches to asset integrity to manage risks to employees, contractors and the general public. Regular reviews of performance delivery and verification has resulted in resilient, reliable assets, despite age. This has allowed cost-conscious business models to be adopted, improving competitiveness and extending the economic life of assets and associated infrastructure.
Similar approaches are possible in the water industry and would allow the step change in the performance Ofwat is demanding in AMP7. 
The methods and tools to capture data, analyse it, build predictive models and make justifiable decisions, all exist. If implemented well the benefits gained are significant.
It is often a case of taking a broader view of asset performance to unlock the potential opportunities, and a robust, learning approach to managing asset integrity delivers safe and sustainable results.